I am an employee of a company and I have health insurance through them, pre tax. My company only pays for me so I have private insurance for my wife and kids. I also have a side business, and was told by a tax professional last year that I can write off the private insurance premiums for my family (not me) under my side business, so long as the the write-off amount does not exceed the amount of profit by the business. Note, I am the only employee of the business.

Is this true? How do I accomplish this? I assume it is somewhere on the Schedule C form.

You used one of the optional methods to figure your net earnings from self-employment on Schedule SE.

You received wages in 2011 from an S corporation in which you were a more-than-2% shareholder. Health insurance premiums paid or
reimbursed by the S corporation are shown as wages on Form W-2.

The insurance plan must be established under your business. Your
personal services must have been a material income-producing factor in
the business. If you are filing Schedule C, C-EZ, or F, the policy can
be either in your name or in the name of the business.

OK, so I am not self employed and the plan is in my wife's name. If I'm understanding correctly, that means I am out of luck. Is that right ?
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ctorxJan 11 '13 at 19:04

Yes. I thought you have a side business, isn't that what you said?
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littleadvJan 11 '13 at 19:07

I do have a side business, but is a sole proprietorship. I bring in anywhere from $10K to $15K a year, but it is not an S-Corp, I don't have an office, and I don't have employees. A tax person I talked to said I could write off their premiums under this business.
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ctorxJan 11 '13 at 19:09

sole proprietor is self employed by definition, what's the problem? You have to have performed personal services (i.e.: investment business or rental, for example, doesn't count), but if you file schedule SE - you're good. In the instructions there's a worksheet on how to calculate the allowed deduction amount.
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littleadvJan 11 '13 at 19:25

1

@ctorx that I think you should ask your tax adviser. These are details pertaining your specific situation that we shouldn't be discussing here.
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littleadvJan 11 '13 at 20:36